Wykoff v. Irvine

By the Oowrt — ElaNdrau, J. — The Defendants were bankers. The Plaintiff left with them the sum of four hundred and twenty-five dollars to be loaned out by them, and took from them the following paper : “ St. Paul, M. T., July 24, 1857. Received of J. P. Wykoff, Esq., four hundred and twenty-five dollars in American gold, to be loaned out. We to account to him for the principal and interest less our charges, &c., not to exceed two and one-half per cent, per annum. “ IrviNe, StoNe & McCormack.” This transaction created between the parties the relation of principal, and broker or agent, to loan money. It confides to the Defendants the entire control of the loans that were to be made with the money, leaving it to their judgment and discretion to select the borrowers, determine the security to be taken, fix the times of the loans, and regulate all other matters concerning them. They were only limited in their conduct to the observancé of good faith, and the exercise of proper care and circumspection. They loaned the money out to some one, and collected it in again with interest, wdiich had swelled the amount to the sum of five hundred and seventy-five dollars. They subsequently re loaned it with the accumulated interest, and took as security a note. The maker of the note subsequently became insolvent, and 'the note worthless. There is no charge of either bad faith or mismanagement in the making of this second loan ; only that the note at the time the Defendants were called upon for an accounting was worthless. If the Defendants acted in good faith and loaned the money to a party solvent at the time of the loan, they are [499] protected. Loitard vs. Graves, 3 Caine’s Rep., 226; McKinstry vs. Pearsoll, 3 John. R., 319; Van Allen vs. Vanderpool, 6 John. R., 69; Robertson vs. Livingston, 5 Cow.,473; Corlies vs. Cumming, 6 181. The complaint however alleges that the money was to be loaned for a period of six months from the time of its receipt by the Defendants, and that the Defendants, without the knowledge or consent of the Plaintiff, reloaned it after the expiration of the six months, and also that the Defendants were to be liable and responsible to the Plaintiff for the amount and interest. These allegations are in direct conflict with the terms of the paper signed by the Defendants at the time they received the money, and could not be given in evidence to contradict it. The relation of the parties to each other was fixed by the writing, and could not be changed by parol. They were agents vested with full discretionary powers to loan the money, and some bad faith, or gross negligence amounting to fraud, must be charged to make them personally liable. The demurrer was well sustained, Judgment affirmed.